On 19 March 2025, the President has ratified the 15th Amendment to the Maldives Tourism Act ¹ (the “15th Amendment”). Among other areas, the 15th Amendment has brought the following key changes to the Maldives Tourism Act ² (the “Tourism Act”):

1. Further extension of the window granted for tourist resorts to pay reduced extension fees for lease extensions;
2. New requirements to formulate compliance codes;
3. New standards for the advertisement of tourism establishments; and
4. Procedure to close tourism properties for redevelopment.

The Amendment also made additional general changes to the Tourism Act which have also been summarised below.

Lease extensions for resort developments

Under the Tourism Act, leaseholders of properties leased for resort development can extend their leases as follows after paying extension fees to the Government:

1. If the initial lease period was less than 50 years, leaseholders can apply for an extension of the lease to up to 50 years;
2. If a leaseholder already has a 50-year lease or has extended their initial lease to a 50-year term, the leaseholder can apply for an additional extension of 49 years to up to 99 years.

The 13th Amendment to the Tourism Act³ granted leaseholders of islands and lands leased for resort development a window until 28 February 2025 to pay reduced fees for such lease extensions.

Under the 15th Amendment, a new window for the payment of reduced fees has been granted, starting on 19 March 2025 and expiring on 18 September 2025.

Importantly, the 15th Amendment introduces the following new options to leaseholders:

• While the Tourism Act did not previously allow leaseholders to further extend 50-year leases for terms less than 99 years, the 15th Amendment has introduced pathways to do so; and
• The 15th Amendment grants leaseholders the opportunity to pay extension fees in installments.

We have summarised below the options presently available to leaseholders following the 15th Amendment:

1. Extension of leases up to 50 years:
   • Payment of lease extension fee of USD100,000 for each year of extension if the leaseholder agrees to settle the payment in lumpsum within the new window; or
   • Payment of lease extension fee of USD200,000 for each year of extension if the payment will be settled in full after the expiry of the new window.
2. Extensions of 50-year leases for an additional 20 years (up to 70 years):
   • Payment of extension fee of USD2,500,000 if the application is submitted within the new window, and if the extension fee will be paid in lumpsum within the new window.
3. Extensions of 50-year leases for an additional 25 years (up to 75 years):
   • Payment of extension fee of USD3,000,000 if the application is submitted within the new window, and if the extension fee will be paid in lumpsum within the new window.
4. Extensions of 50-year leases for an additional 49 years (up to 99 years):
   
   • By lumpsum payment within the new window: Payment of extension fee of USD5,000,000 if the application is submitted within the new window, and if the extension fee will be paid in lumpsum within the new window.
   • Under a 12-month installment plan: If the application is submitted within the new window, the payment of a total extension fee of USD5,500,000, with (i) an initial payment of USD1,500,000 within the new window, and (ii) the payment of USD4,000,000 within 12 months from the date of the application.
   • Under a 24-month installment plan: If the application is submitted within the new window, the payment of a total extension fee of USD6,000,000, with (i) an initial payment of USD1,500,000 within the new window, and (ii) the payment of USD4,500,000 within 24 months from the date of the application.
   • By lumpsum payment after the new window: Payment of extension fee of USD10,000,000.

The Ministry of Tourism and Environment (the “Ministry”) is required to formulate regulations on the process for the payment of lease extension fees in installments under the 15th Amendment.

In addition, if a leaseholder applies to the Ministry to pay for a lease extension in installments, the lease extension will only take effect after the payment has been settled in full. If the payment is not made within the required period, the application for the lease extension will be terminated. Under such circumstances, the amounts already paid to the Government will not be refunded to the leaseholder, but may be set off against the amounts to be paid by the leaseholder as lease rent.

Compliance Code

The 15th Amendment requires tourism establishments to formulate a compliance code (the “Compliance Code”) which covers the safety and operating standards of each service area of the establishment. The deadline provided to tourism establishments to formulate Compliance Codes is 18 March 2026.

The Ministry is required to put together the minimum standards required to be met by Compliance Codes formulated by tourism establishments.

Advertising rules

For the first time, the 15th Amendment has also introduced rules regulating the promotion and advertisement of tourism establishments.

While detailed rules are set to be stated in regulations to be put together by the Ministry, the 15th Amendment provides the following basic requirements:

1. The establishment can only be advertised as the type of tourist facility stated in its Registration Certificate and/or Operating Licence.
   (E.g., a property registered with the Ministry as a tourist guesthouse cannot be advertised as a tourist hotel).
2. If the Ministry has declared that a tourism establishment is of a particular level or category, the establishment cannot be advertised as falling under a different level or category.
   (E.g., if the Ministry at any time introduces any classification or rating system for tourism establishments, the establishment can only advertise itself under the classification or rating issued to it by the Ministry).
3. The establishment must ensure the completeness and accuracy of information provided by the establishment on:
   • The tourism establishment and the services provided at the establishment.
   • The natural environment surrounding the tourism establishment or of any area of the Maldives.
   • The area surrounding the tourism establishment and the services available in that area.

While tourism establishments registered at and licensed by the Ministry have the automatic right to advertise themselves in compliance with the applicable rules, properties under development are required to obtain the approval of the Ministry before advertising the property.

Rules on closing for redevelopment

While the Regulation⁴ issued by the Ministry on the extension of construction periods and the granting of rent and fine deferrals (the “CP Extension Regulation”) already states that a redevelopment period can only be granted for a tourism establishment under an amendment to the lease agreement of the property⁵, the 15th Amendment has expressly incorporated this requirement into the Tourism Act.

The 15th Amendment states that the Ministry has the discretion to terminate the lease agreement and take steps against the lessee if a tourism establishment is not redeveloped and reopened within the redevelopment period granted by the Ministry⁶. In addition, the 15th Amendment specifies that the Government will not be required to compensate the leaseholder if a lease agreement is terminated for this reason.

General changes

Allocation of uninhabited islands and lagoons within the jurisdiction of local councils for tourism purposes

The 15th Amendment provides that local councils can allocate land falling within their jurisdiction for the development of tourist hotels and tourist guesthouses in their Land Use Plans.

However, uninhabited islands and lagoons falling within the jurisdiction of local councils can only be designated for development for tourism purposes by the President.

Updated purposes for which properties can be leased as cross-subsidy

Prior to the 15th Amendment, properties could only be leased as cross-subsidy for implementing or financing significant projects under either economic or social policies of the Government.

However, under the 15th Amendment, islands can also be leased as cross-subsidy for implementing or financing projects under any other important policies determined by the Government.

Tourism trust fund

For the first time, the 15th Amendment has introduced detailed rules relating to the establishment of a tourism trust fund, including rules on its management, expenditure and investment.

The 15th Amendment abolishes the tourism industry trust fund established under the Public Finance Act⁷ and transfers all existing assets of the fund to the newly established tourism trust fund.

Updates to defined terms

Under the 15th Amendment, the defined term “Hotel” has been replaced with the term “Tourist Hotel”, which is now defined as a facility prepared on a part of an island for accommodating tourists, with arrangements made for lodging and meals, and which has certain facilities determined by the Ministry. This term is stated in the 15th Amendment to exclude tourist resorts, resort hotels, and tourist guesthouses.

In addition, the definition of the term “Tourist Guesthouse” has been updated to reflect that tourist guesthouses can be developed on land leased by local councils.

Deadline for regulations

The Ministry is required to make any required changes to existing regulations necessitated by the 15th Amendment, and to formulate any new regulations required under the 15th Amendment, by 18 June 2025.

Effective Date

The 15th Amendment became effective on 19 March 2025.